All HDTV sets nowadays convert incoming regular NTSC (interlaced; 480i) into progressive scan (the 480p variety) using a built in circuit called a de-interlacer or line doubler. Most HDTV's will do another step and convert the 480p into 540 scan lines per frame and display that as interlaced (1080i). (Or convert the 480p into 720 or 768 scan lines stil displayed progressive.)
A small number of HDTV's have a 540p/1080i setting that usually functions with all inputs. The video content stays the same, all that seting does is optically shift the 540 scan line fields to be superimposed looking progressive (540p) or staggered looking interlaced (1080i).
The difference between interlaced and progressive (at the 480 level) is easier to see if you wear relatively strong eyeglasses. If you wiggle your glasses up and down, you will see a coarse scan line effect on traditional (analog) TV's that you don't see on HDTV's.
Unfortunately, even today, the quality of the conversion from 480i to 480p varies widely in terms of picture detail preservation. DVD is inherently interlaced so all progressive scan DVD players have a de-interlacer.
Video hints:
http://members.aol.com/ajaynejr/viddoubl.htm
